ADB ups India's growth forecast to 7.2% for FY26, from earlier 6.5%

India's 2025 growth projection reflects a stronger third-quarter expansion as tax cuts supported consumption. The 2026 forecast stays unchanged at 6.5 per cent.

The multilateral development bank has on Wednesday raised its growth forecasts for economies in developing Asia and the Pacific for this year and next, amid stronger-than-expected exports and reduced trade uncertainty following the conclusion of several trade agreements with the United States.

Resilient exports--particularly of semiconductors and other technology products-- moderating inflation, and stable financial conditions have strengthened the region's growth outlook, the ADB said.

Lifted by stronger-than-expected growth in India, the region's economy is now projected to expand by 5.1 per cent this year, compared with a 4.8 per cent forecast in September, according to Asian Development Outlook (ADO) December 2025, released today.

The outlook for next year has also been upgraded by 0.1 percentage points to 4.6 per cent.

"Asia and the Pacific's solid economic fundamentals are underpinning robust export performance and steady growth, despite a global trade environment clouded by historic levels of uncertainty over the past year," said ADB Chief Economist Albert Park.

"Trade agreements have partly eased that uncertainty, but external and other challenges could still weigh on the outlook. Governments in the region should continue to foster open trade and investment to sustain resilience and growth."

Risks to the regional outlook include renewed trade tensions and financial market volatility, as well as geopolitical pressures and a worse-than-expected deterioration in China's property market.

Inflation in developing Asia and the Pacific is expected to ease further to 1.6% this year, compared with a 1.7 per cent projection in September. This mainly reflects lower-than-anticipated food inflation in India. The region's inflation forecast for next year remains at 2.1 per cent. (ANI)